- China retaliated with tariffs on American goods after Trump doubled levies on Chinese goods.
- China is taking aim at US agriculture imports, including soybeans, pork, and beef.
- Beijing’s targeted approach shows it’s trying not to escalate the trade war too much, say analysts.
China swiftly retaliated against new tariffs from the Trump administration on Tuesday, showing Beijing isn’t in a hurry to reach a deal on the trade war.
The new measures from Beijing came within an hour of US tariffs against Chinese goods, which doubled from 10% to 20% at 12:01 a.m. ET on Tuesday.
In retaliation for the levies, Beijing announced additional tariffs of 10% to 15% on some US imports starting March 10.
They include 10% tariffs on US soybeans, pork, and beef imports and 15% tariffs on chicken and cotton imports, according to the Commerce Ministry.
Beijing also targeted American farm imports into China when US President Donald Trump started the trade war in his first term.
Beijing’s speedy response on Tuesday — reminiscent of Beijing’s swift response on February 4 against the US’s first tranche of tariffs — is an indication that Chinese leader Xi Jinping’s administration was prepared for the moves.
Markets in Asia were broadly lower early on Tuesday due to worries over the impact of the trade war. But losses were limited as investors were already prepared, said analysts.
Japan’s Nikkei 225 closed 1.2% lower after falling by as much as 2.7%. Hong Kong’s Hang Seng Index closed 0.3% lower and China’s CSI 300 ended little changed.
China’s measures also appeared contained, Gary Ng, a senior economist at Natixis, told Business Insider. He said Beijing stuck to its “playbook of retaliation,” similar to the moves it used on February 4. Last month, the country announced tariffs on some US goods and imposed export controls and market access restrictions on select companies.
Beijing’s agriculture-focused response still appears to be more about posturing than it is about causing significant disruptions to the wider economy, Jun Rong Yeap, a market strategist at IG, an online trading provider, told BI.
“We need to keep in mind that the US imposed tariffs on all China’s exports, while China only retaliated on a small share of US exports to China,” wrote Zhiwei Zhang, the president and chief economist at Hong Kong-based Pinpoint Asset Management, in a note on Tuesday.
Still, Zhang is sounding caution over investor complacency.
“I think the market underestimates the potential damage of trade wars on the global economy,” he wrote.
Separately, Beijing announced on Tuesday it’s banning California-based biotech firm Illumina from selling gene sequencing products in China to “safeguard national sovereignty, security and development interests,” the country’s Commerce Ministry announced.
Beijing also added 10 US companies to a list of unreliable entities and imposed dual-use item export controls on 15 US entities.
DeepSeek confidence is buoying China
China’s markets have recently been supported by renewed interest in its tech stocks following DeepSeek’s meteoric rise.
At a press briefing on Monday, Scott Kennedy, a China specialist at the Center for Strategic and International Studies, said China feels it’s in a “much better position” than during Trump’s first term in office. Because of significant tech advances, Beijing is not “desperate” for a Trump deal, he said.
“If they’re going to reach a deal, they want it to benefit China and not just be a one-way list of concessions from Beijing to Washington,” Kennedy said.
Trump is doubling down on tariffs just as Beijing holds its annual political meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference known as “Two Sessions.”
Investors are watching for signs that China will step up stimulus measures amid heightened trade tensions, a prolonged economic downturn at home, and weak domestic consumption.
Chinese Premier Li Qiang is expected to deliver the government work report on Wednesday that is set to detail top policy priorities and reveal China’s 2025 GDP growth target.
